Europe's deal to stave off its debt crisis sent markets soaring and bolstered the euro, but some analysts are sceptical it is a long-term solution, suggesting the devil lies in the detail.

Global leaders including China, Japan and Russia welcomed the deal, which involves raising the eurozone bailout fund - or the European Financial Stability Facility - to $1 trillion and shaving the big banks' Greek debt holdings by 50 per cent.

But Yanis Varoufakis, Professor of Economics at Athens University in Greece, the epicentre of the crisis, says the numbers look "flimsy" and are not "founded on anything that resembles the reality on the ground".

"What I think has happened is this: our leaders now have committed, back a week ago when they met in the G20, to come up with a comprehensive solution to the eurocrisis," he told ABC TV's Lateline.

"At around four o'clock in the morning they hadn't reached any serious agreement, so they decided to give George Orwell his latest triumph by describing their failure to agree, their impasse, as a success, as a triumph of convergence," he said.

"They're hoping, I think, that in the next few weeks, probably months, something of a rational plan will emerge magically out of that mess that they found themselves in overnight."

News of the deal sent European shares soaring to their highest close in 12 weeks overnight, with a surge in the banks.

The STOXX Europe 600 Banking Index rose 8.9 per cent, though strategists warned that the market gains may be short-lived after more details of the plan become available.

The FTSEurofirst 300 index of top European shares rose 3.7 per cent to 1,020.10 points, the highest close since August 3. Trading volume was high, at 137.7 per cent of the 90-day average for the index, breaking a recent pattern of weak volumes.

US stocks soared, the Dow Jones pushed toward its largest monthly gain in a quarter century rising almost 3 per cent to 12,209.

The Australian dollar had one of its biggest overnight rallies, rising almost four cents to 107.4 US cents.

At 9:30am (AEDT) the dollar was buying 107.1 US cents, 81.3 Japanese yen, 66.6 British pence, 75.5 euro cents and $NZ1.30.

On commodities markets West Texas Crude Oil was worth $US94 a barrel, while Tapis crude was worth $US121.50 a barrel.

Spot gold was buying $US1,742 an ounce.

In futures trading locally the ASX SPI 200 was up 59 points to 4,417.

"Decisions have been made in Europe, and even if we are short on detail Europe's leaders are talking the right game and the markets seem to like it," said Kathleen Brooks, an analyst at traders Forex.com.

But key aspects of the deal, including the mechanics of boosting the EFSF and providing Greek debt relief, could take weeks to pin down, meaning the plan to rebuild confidence after two years of crisis could unravel over the details.

Professor Varoufakis said European politicians have created such low expectations in the markets that they are "very hard to surprise negatively" but he expects the mood to dampen.

"Even if the news is bad as opposed to atrocious, the markets are going to receive a little bit of a boost today," he said.

"But I think that once investors pore over the details of what's happening, they will realise that nothing much has happened, so it would be back to business as usual ... in the next two or three days."

With the deal reached, IMF chief Christine Lagarde welcomed "substantial progress", but European Central Bank chief Jean-Claude Trichet warned that "all of this now requires a lot of work and a lot of quick work".

Many analysts likewise welcomed the deal by European Union leaders, repeatedly accused of doing too little too late in the face of a festering two-year crisis, that after claiming Greece, Ireland and Portugal threatens Europe's third and fourth economies, Italy and Spain.

Russia said the deal was grounds for "cautious optimism" to hold off dangers on the global front, while China pledged faith in the eurozone and confirmed president Hu Jintao would speak to French counterpart Nicolas Sarkozy later Thursday (local time).

Beijing, like Moscow, reiterated it would likely take a stake in the European rescue fund through the IMF, a sign that emerging economies plan to play a larger role in the world economy.

The eurozone deal aims to slice a whopping 100 billion euros off the 350-billion-euro debt pile hampering Greece, which also approved an accord for a 100-billion-euro loan over the next three years.

But financial analysts said they were waiting to see if all banks would sign on.

"We still have no confirmation of the extent of the voluntary take-up," said Azad Zangana, of Schroders Quickview.

Addressing a packed parliament before the vote, Merkel urged the lower house Bundestag to fulfil its "historic duty" and said Europe was in its toughest phase since the end of World War II.

Afterwards, Greece prime minister George Papandreou hailed "a new era, a new chapter" for Greece, which triggered the crisis which threatened to trigger global recession.

You have no doubt been hearing a lot about the Paris Agreement and know that it pertains to climate change, but are too embarrassed at this stage to ask for an overall explanation of what it's all about.